President Donald Trump signed an executive order Monday to create a sovereign wealth fund, the first ever for the country. At the presser, he hinted that the money may be used to buy TikTok with it. A sovereign wealth fund is a state-owned investment fund comprising assets like stocks, bonds, property, or other financial assets — meant for use to invest in highways, airports, manufacturing hubs, medical research etc. Norway’s Government Pension Fund Global, Abu Dhabi’s Investment Authority, Singapore’s Temasek Holdings and GIC are some of the examples of sovereign wealth fund.
“We’re going to stand this thing up within the next 12 months. We’re going to monetize the asset side of the U.S. balance sheet for the American people,” he told reporters. “There’ll be a combination of liquid assets, assets that we have in this country as we work to bring them out for the American people.”
The Sovereign Wealth Fund was Trump’s election promise which he said could fund great national endeavors. Trump had said during the campaign at the Economic Club of New York that the money would be brought in through tariffs and “other intelligent things.”
US’s TikTok plan
TikTok was briefly taken down as the law requires its Chinese owner ByteDance to either sell it to an American owner or face a ban. The law came into effect on January 19. But Trump as he took office on January 20 signed an executive order seeking to delay the TikTok ban in the country by 75 days. Trump said he was in talks with several people over TikTok’s purchase and the US government would be able to take a decision about TikTok’s future in February.
What we know about US sovereign wealth fund
- Treasury secretary Scott Bessent and commerce secretary Howard Lutnick are in charge of laying the groundwork for creating the fund, which would likely require congressional approval.
- The fund will be opened within the next 12 months, Lutnick said. The fund could also enable the government to take a profit-earning stake in vaccine manufacturers.
- TikTok is one of the options the fund could do. “We might put that in the sovereign wealth fund, whatever we make or we do a partnership with very wealthy people, a lot of options,” Trump said.
- Former president Joe Biden had studied the possibility of creating such a fund for national security investments but it did not materialize.
